Purchasing Shares of AMC: A Step-by-Step Guide

AMC Entertainments (AMC dropping by -0.71%) has been on quite a rollercoaster ride recently, swerving from the brink of bankruptcy to soaring heights due to the influence of meme investors. Despite its continued volatility and precarious financial position, AMC has managed to maintain some level of popularity. In this comprehensive guide, we'll walk you through how to invest in AMC, as well as provide you with essential information about the company.

Purchasing AMC Shares

How to Buy AMC Shares

Want to get in on the AMC action? Follow these straightforward steps to learn how to purchase AMC shares. Once you've got the hang of it, we'll delve deeper into the company and whether or not investing in AMC is a wise decision.

A share is essentially an ownership stake in a business. When a company is in need of funding, its board of directors will decide the number of shares to issue.

Step 1: Open a Brokerage Account

To invest in AMC or any publicly traded company, you'll need a brokerage account. Take a look at our top picks for the best brokerage platforms. With quick and easy online application processes, opening an account will be a breeze. Don't forget to transfer money to your newly created account, as bank transfers can take several days to process.

Step 2: Determine Your Investment Strategy

Decide on how much you'd like to invest and how often you'd like to invest. If you're simply interested in adding AMC to your portfolio, consider making a one-time investment to see how it performs. Alternatively, try out dollar-cost averaging, where you invest a specific amount on a regular schedule, such as $250 per month.

Remember, diversifying your investments is key to a solid financial strategy. Putting all of your money into a single company is not advisable. If you're new to investing, allocate only a portion of your funds to AMC and invest the remaining amount in a diverse range of companies.

Step 3: Research AMC

Spend some time researching AMC, including its financial results, leadership, and recent developments. Conducting thorough research is crucial to making informed investment decisions.

If you're looking for a more effortless investment approach, consider investment funds. Later in this guide, we'll discuss several exchange-traded funds (ETFs) with exposure to AMC. ETFs let you invest in multiple companies in one transaction, reducing the time and effort required for individual research.

Exchange-Traded Fund (ETF)

An exchange-traded fund (ETF) is a type of investment vehicle that allows you to buy shares of various companies or bonds at once.

Step 4: Place Your Order

Log in to your account, go to your broker's trading tool, and enter AMC's ticker symbol: AMC. Choose the buy option and input the desired investment amount.

Select an order type from the available options. If you want your order to be executed immediately, select a market order. Market orders are typically filled at the best available price. Alternatively, you can place a limit order, specifying the maximum price per share that you're willing to pay.

Should I Invest?

Is AMC Stock a Good Investment Option?

AMC stock is a high-risk proposition, having suffered significant declines since reaching record highs in 2021. Although the stock has lost favor among meme investors, such as the members of the Reddit (RDDT 2.31%) subreddit r/WallStreetBets, it has experienced a slight resurgence in popularity.

The primary concern with AMC is its financial performance. While it's understandable that the company experienced significant losses during the early stages of the COVID-19 pandemic, AMC recorded a net loss of $4.59 billion in 2020. Fortunately, the company's losses have gradually decreased over the following years, with net losses of $1.27 billion in 2021, $973.6 million in 2022, and $396.6 million in 2023.

Furthermore, AMC is burdened with a substantial amount of debt. As of the third quarter of 2024, the company had $8.3 billion in total debt against $527.4 million in cash. While there's always a chance that AMC could rebound, especially as the movie industry recovers from the pandemic, it may be overly optimistic to expect such a turnaround, given the company's financial difficulties.

There have been numerous significant releases in the recent past, such as Avatar: The Way of Water, Barbie, Spider-Man: No Way Home, and Black Panther: Wakanda Forever. Despite these releases contributing to AMC's growth, the theater chain still struggles to achieve profitability.

Home streaming services are gaining popularity and are becoming a preferred alternative to movie theaters. Consequently, the theater industry's market share has witnessed a decline as many individuals opt for the comfort of watching movies at home.

AMC's low share price posed a risk of de-listing from the New York Stock Exchange. As a result, in August 2023, AMC executed a reverse stock split to counteract this issue. However, the share price continues to decline even after the split.

The AMC short squeeze in 2021 was a thrilling experience for investors with bullish sentiments toward the stock. However, it is unlikely that similar results will be repeated in the future. AMC stock is a high-risk, highly volatile investment and may not be suitable for a substantial portion of one's investment portfolio.

Profitability

Is AMC profitable?

AMC has consistently reported losses, posting a net loss of $396.6 million in 2023. Despite showing improvements since its $1.27 billion loss in 2021, the company continues to incur substantial losses, and achieving profitability seems unrealistic, particularly given its high debt levels.

Dividends

Does AMC pay a dividend?

AMC temporarily paid a quarterly dividend but stopped issuing dividends beginning in 2020. As part of a legal settlement connected to AMC's stock conversion plans, AMC issued a 13.3333% stock dividend as a one-time distribution to shareholders on August 28, 2023.

Given that AMC is not making any profits, it is unlikely that the company will resume paying quarterly dividends in the near future. Investors seeking reliable income sources should consider our dividend stock picks instead.

ETF options

ETFs with exposure to AMC

While AMC stock is popular among individual investors, numerous ETFs also hold this stock. By investing in an ETF, you can diversify your portfolio while still having exposure to AMC. The following ETFs are worth considering due to their holdings of AMC:

The SoFi Social 50 ETF (SFYF -0.6%) invests in the 50 companies most commonly held by the SoFi Active Invest community. Its significant holdings include tech stocks like Tesla (TSLA -2.43%), Nvidia (NVDA 3.05%), and Apple (AAPL -0.64%). AMC is also included in the list of popular picks among SoFi investors.
The Optimize Strategy Index ETF (OPTZ -0.73%) invests in innovative American companies. Among its holdings are Nvidia, Salesforce (CRM 0.16%), and Dell Technologies (DELL 0.63%).

These ETFs have a significant allocation to AMC, making them attractive options for investors looking to gain exposure to this stock. Alternatively, you could invest in a broader ETF with a smaller AMC allocation. Options include the Vanguard Small-Cap ETF (VB 0.31%), which focuses on small-cap stocks, and the iShares Russell 2000 Value ETF (IWN 0.46%), which invests in undervalued small U.S. companies.

Stock splits

Will AMC stock split?

AMC executed a 10:1 reverse stock split in August 2023, meaning every investor received one share for every 10 shares they previously held. The stock split aimed to boost AMC's share price, which was nearing penny stock territory. Companies do not often perform stock splits, so it is unlikely that AMC will announce any upcoming stock splits in the near future.

**#### What are meme stocks and are they worth the investment?

Meme stocks refer to stocks whose price is driven by social media trends and online discussions. Investors should approach meme stocks with caution, as their prices can be highly volatile and unpredictable.

Best movie theater stocks

If you are interested in movie theater stocks, consider the following options: Cineworld Group Plc (LON: CINE), Regal Entertainment Group, Inc. (NYSE: RGC), and Cinemark Holdings, Inc. (NYSE: CNK).

How to invest in Netflix in 2024

To invest in Netflix, follow these steps:

Open a brokerage account to buy and sell Netflix stocks
Research the financials and company outlook
Decide on the amount you wish to invest
Place an order with your brokerage to buy Netflix stock
Monitor and manage your investment as required

How to invest in DreamWorks Animation (DWA)

To invest in DreamWorks Animation (DWA) through Comcast (CMCSA), you can:

Open a brokerage account to buy and sell Comcast trades
Research the financials and company outlook
Decide on the amount you wish to invest
Purchase Comcast shares
As Comcast owns a portion of DreamWorks Animation, your investment will indirectly benefit from DreamWorks’ performance.

The bottom line on AMC stock

AMC experienced significant gains in 2021, but its performance has since deteriorated. Investors would be better served by seeking companies with less volatility and more potential for long-term growth.

Lyle Daly holds investments in AMC Entertainment and Tesla. Our platform advocates for Apple, Nvidia, Salesforce, Tesla, and Vanguard Index Funds - Vanguard Small-Cap ETF. Our platform outlines a transparency policy.

Here are two sentences containing the words 'investing', 'money', and 'finance':

To successfully invest money in AMC, it's essential to follow a well-thought-out strategy, considering factors such as your financial goals and risk tolerance.
After purchasing AMC shares, monitor their performance regularly and adjust your investment strategy according to changes in the company's financial standing and market conditions.

Purchasing Shares of AMC: A Step-by-Step Guide